What credit scoring system do car loans use?

I'm a bit confused. I know there are different credit scoring systems. What do car loans use?

Answer
It can definitely be confusing, but hopefully, I can help. When you apply for a car loan, your credit history heavily influences whether or not you will be approved for a loan by a bank. If approved, your credit score is used to determine the interest rate attached to your loan.
The two major credit scoring systems are VantageScore and FICO. Use varies by lender.
VantageScore’s ratings look like this:
  • Excellent: 781-850
  • Good: 661-780
  • Fair: 601-660
  • Poor: 500-600
  • Very Poor: 300-499
FICO’s ratings look like this:
  • Exceptional: 800-850
  • Very Good: 740-799
  • Good: 670-739
  • Fair: 580-669
  • Poor: 300-579
As you can see, because there are different systems, what is considered good credit differs. But generally, 660 or higher is good and loan applicants with this score or higher shouldn’t have a problem securing financing.
As you continue to pay your bills and loans, your credit scores change. And because of this, your car loan can be adjusted to save money. This can be done through refinancing.
Refinancing allows you to re-do your loan agreement. You can refinance through the Jerry app. We’ll compare the options among top lenders, saving you the hassle and delivering the best deals directly to you in minutes. On average, people pay $85 less every month on their car loans after refinancing.
Lauren Smith
Answered on Nov 19, 2021
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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